Imagine having the money to live comfortably, take a dream vacation, pay for your child’s education and maintain your lifestyle during retirement. For many, financial freedom may seem like a pipedream; however, by adhering to a spending plan (budget), it is possible to eliminate debt, save for a rainy day and alleviate the stress you feel every month when you pay your bills.

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How to Achieve Financial Freedom

Budget: Spending Money on PurposeTo achieve financial freedom, you must create an intentional spending plan and stick with it. Though it may feel overwhelming, a spending plan is necessary in order to meet your short- and long-term financial goals.

Get a clear picture of your current financial situation:

1. List all of your fixed expenses, such as utilities, groceries and debt payments.

2. List all of your irregular expenses. These expenses are due throughout the year, including taxes, car maintenance and vacations.

3. Every other expense is discretionary spending. This includes shopping and your daily gourmet coffee run.

4. A, B, C your expenses. A’s are needs. B’s are needs you can be more efficient with, like utilities or groceries. C’s are wants.

5. Total your expenses and compare them to your net income. If your expenses total more than your income, then it’s time to reassess your spending habits and make cuts from your B’s and C’s.

Save: Paying Yourself First

• Make it automatic. Sign up for your bank’s automatic transfer program and move a

percentage of your paycheck to your savings account each payday.

• Ask for discounts. For example, ask your insurance company about discounts that you may qualify for, which can lead to savings on your premium.

• Think before you buy. To resist impulse buys, wait 24 hours to buy an item. It may turn out that you do not need it after all.

If you have to finance it,

you can’t afford it. The

only exceptions to this rule

are homes and cars. If you

can’t pay for it on-the-spot,

then you should wait

to buy it until you have

saved the cash.

58% of Americans track their spending against a monthly budget.

Source: Bankrate.com

*Source: Federal Reserve Bank of Boston

The average American with a credit file has over $16,635 in debt, excluding a mortgage.Source: US News and World Report

LoansMost loan payments are calculated using compounding interest, which is the interest that is added to the principal of the loan each month that the balance is outstanding, causing you to pay interest on interest. Although it’s designed to work against you, it is possible to pay off the loan three to four times faster with minimal additional cost to you, just by knowing your “magic number.”

Your “magic number” is the portion of your monthly payment that goes to pay the principal. To pay your loan off quickly, double, triple or quadruple your principal, or “magic number” each month.

Tips to Help You Stick toYour Budget•Set90daygoals.

•Trackdailyandweeklyexpensesto know where your money is going. •Askforhelp. Enlist a friend or loved one to help

you remain accountable to your budget. •Focusonthewin! Imagine how you’ll feel

when you’ve paid off your debt and have achieved financial freedom. •Useasmallportionofthesurplusto rewardyourself.

Credit CardsThe average credit cardholder has 3.5 cards.* If you have outstanding balances on two or more credit cards, use the rollover formula to pay them off.

• Make a larger payment on the card with the highest interest rate and pay the minimum on the rest.

VISA DISCOVER CARD

MASTERCARD

21.9%

$45 Monthly Minimum

+$100= $145 Total

+

VISA DISCOVER CARD

MASTERCARD

17.9%

$35 Monthly Minimum

+

VISA DISCOVER CARD

MASTERCARD

11.9%

$25 Monthly Minimum

=Total

Monthly Payments

$205

• Once this card is paid off, apply the amount of its payment to the minimum amount you were paying on the card with the second highest interest rate.

VISA DISCOVER CARD

MASTERCARD

17.9%

$35 Monthly Minimum

+$145 =$180Total

+

VISA DISCOVER CARD

MASTERCARD

11.9%

$25 Monthly Minimum

=Total

Monthly Payments

$205

• When the second card is paid off, add that amount to the payment of the third card, etc. until you have paid off all of your credit cards.

VISA DISCOVER CARD

MASTERCARD

11.9%

$25 Monthly Minimum

+$180=$205Total

=Total

Monthly Payments

$205

Congratulations, you’ve eliminated your credit card debt. Now apply your $205payment to your monthly savings.

Eliminate Debt

Marilu Kafka

Prudential CT Realty435 Hartford TpkeVernon, CT 06066

860-305-8967

mariluk@yahoo.commarilukafka.com